Shares of Yum! Brands (YUM) jumped in post-market trading after the fast food company reported second quarter results roughly in line with analyst expectations and gave upbeat commentary on the separation of its China unit.
EARNINGS/GUIDANCE: After the market close, Yum! reported Q2 adjusted earnings per share of 75c, which was slightly higher than consensus estimates of 74c, on revenue of $3.01B, which fell slightly short of expectations for $3.09B. Same-store sales for the quarter were flat, with China SSS also even, the company said. With respect to its biggest segments, Yum! said comparable sales for KFC rose 2%, Pizza Hut was flat, and Taco Bell fell 1% year-over-year. In addition, the company raised its fiscal 2016 core operating profit growth guidance to at least 14% from the previous view of 12%, citing its "strong first-half results and current trends in China."
GOOD START TO Q3: Yum! CEO Greg Creed remarked that "our China division is off to a good start in the third quarter for both KFC and Pizza Hut Casual Dining, including a return to positive same-store sales at Pizza Hut Casual Dining in recent weeks."
CHINA SEPARATION: Yum! also gave an update on its China separation, saying it is on track to complete the process with a target finalization date of October 31. "Our capital structure is fully in place and we plan to return a significant amount of capital to shareholders both prior to and after the spin," Creed added.
WHAT'S NOTABLE: Late last month, Bloomberg reported that the sale process for a stake in the fast food company's China unit had been postponed after potential suitors missed a deadline earlier in June to submit offers. The investors held off submitting bids after Yum! imposed new conditions on the investments, Bloomberg added, citing a person with knowledge of the matter.
PRICE ACTION: In after hours trading, Yum! Brands rose 4.74% to $89.80.
Comments
Log in or sign up to join the conversation.